December 2009

December 17, 2009

As Anne Thomas Manes and many others commented on yesterday, IBM announced their intention to acquire BPM infrastructure vendor Lombardi.

An Opportunity for IBM

IBM was missing the business empowerment and collaboration pieces from their BPM story. Now they’ve got them. No question about Lombardi’s leadership on those fronts. The question is how to weave these capabilities into a coherent, believable platform for influencing outcomes using processes, not just "a grab bag" (as one of our clients calls typical stacker BPMS products). And what an embarrassment of riches IBM has now:

Deal Date

Acquirer

Acquired

Dec-09

IBM

Lombardi (BPM)

Aug-09

IBM

ILog (Rules)

Jun-07

IBM

TeleLogic (EA modeling)

Aug-06

IBM

Webify (Services/MDA)

Aug-06

IBM

FileNet (ECM)

Apr-05

TeleLogic (EA Modeling)

Popkin (BP modeling)

Sep-02

IBM

Holosofx (BP Modeling)

Recession-proof?

The BPM infrastructure market was looking recession-proof. On analyst briefing calls this year, everyone's revenue numbers were heading the right direction. The leading pure-play vendors were all talking about operating from cash. So, was the business model shakier than we thought? Has the credit-crunch felled yet another solid-but-credit-strapped company? Did the VCs panic and hit eject? We don't know, but Miko Matsumura's opinion is that "undisclosed sum" is code for forced sale. If, and this is a big if, Lombardi was compelled to sell itself, where does that leave the other pure-plays, even the leaders like Pegasystems, Appian, and Savvion?

The problem for IBM's salesforce: go deep or wide?

One of the differentiators of pure-play anything is their single-mindedness. An intrinsic part of a pure-play BPM sale is rolling out the pure-play CXOs to meet the prospect's business managers. Lombardi's prospects get to meet Phil Gilbert and Rod Faveron up close and learn from their "we-live-and-breath-BPM-experiences". With all due respect to Phil and Rod, and of course we don't know their post-handcuffs plans, that's not the way IBM are likely to do a sale. Of course there is an executive responsible for BPM within IBM, right now he is Craig Hayman. Craig is a senior guy, but he's not Sam Palmisano. The point is that the IBM salesforce will have more difficulty selling their passion for BPM outside their traditional IT audience.

"Take two bottles into the shower? Now I just wash and go."

Product coherence is a real issue for BPM buyers. Many organizations doing BPM have matured to demand infrastructure that handles different process types seamlessly. Using the "process, information, people" triumvirate, to describe how to approach BPM based on 3 different products won't wash. The teams we have spoken to have said that an offering of WebSphere Process Server plus FileNet just isn't an attractive proposition from portfolio complexity point of view, regardless how well each product handles specific process patterns. Take another discrete BPM product family into the mix? To make this work and become a leader, IBM has a serious product integration job to do. I don't doubt it can do it, if it has the will. The short-term, more-revenue-for-three-products strategy is a short sighted one. Like SOA, BPM is a long game. You need to bring your customers with you, not make them feel more aggravated about maintenance fees over time.

Portfolio Overlaps

Sure there are some overlaps: IBM's BlueWorks BPM which is built on Lotus and Lombardi's BluePrint are two SaaS collaborative modeling environments. Something has got to give here. The remaining product or combination of these will be fighting a battle to be the go-to modeling environment with whatever results from Software AG and IDS Scheer's mashup of ARIS and AlignSpace. Our research shows clearly that the value of BPM tooling is heavily biased toward the modeling environment –using the process model as a nexus of cross-functional business improvement discussions. So this is the key battleground to watch in the next 12-18 months. Another overlap is recently updated WebSphere Business Monitor and TeamWorks' BAM capabilities which are both pretty sexy. Something's also got to give here. Planning another acquisition like Lombardi, may explain partly why IBM has not developed the Holosofx tools into a fully-fledged business-focused modeling environment over the last couple of years.

Questions in customers minds

Acquisition always makes the acquired's customers nervous. Things change – just ask BEA customers about maintenance fees and Eclipse tooling support. One price of entry for pure-plays is engineering their engines to run in a wide range of runtime containers. If my enterprise standard application server is WebLogic, I need your BPM product to run on WebLogic. I'm not going to certify and engineer another application server in my environment for you. How long will runtime aspects of TeamWorks be deployable on a range of application servers? What kinds of "optimizations" are planned for running the TeamWorks process execution engine on WebSphere AS? Vendors making a platform acquisition always counter with "well it would be crazy to cut off a revenue stream, wouldn't it?" And yes it would, looking a BPM adoption strategy lens. Viewed through a "WebSphere as the only platform you'll ever need"strategy lens, support for WebLogic and JBoss looks less of a no-brainer.

December 16, 2009

The bignews for today is that IBM "has signed a definitive agreement to acquire Lombardi" for an undisclosed amount. I missed the analyst briefing this morning, but based on the press release, the slide deck, and the tweetstream from other analysts, it appears that IBM will be folding the Lombardi products into the WebSphere product family, and that it will become part of the IBM BPM Suite, which currently comprises WebSphere Dynamic Process and FileNet Active Content Edition. IBM has also indicated that it plans to position Lombardi as a
departmental tool, which will provide them with a lever to push the other two solutions for enterprise-wide deployments.

Some analysts have hailed this move by IBM, as witnessed in the initial tweetstream, e.g.:

I also recommend reading Miko Matsumura's irreverent but insightful analysis -- very well balanced considering that he is a competitor.

My reaction is a bit different, and it reflects the comments we've been hearing from our customers: IBM already has too many BPM products, and a third one will only aggravate the situation. This acquisition might make sense if IBM intended to rationalize the products and create one leading-edge product that addresses all BPM use cases (e.g., human-centric, system-centric, document-centric, case-centric, etc). But it seems pretty clear that IBM has no intention to do so.

And why should they? They'll generate a lot more revenue selling an organization site licenses for three products than for just one. And given the burden it will place on end-customers to try and figure out which product to use where when optimizing a business process, it will also give a boost to IBM global services.

Most Lombardi customers that we've spoken to speak highly of the company -- both in terms of the technology and the people. So I can't fault IBM for picking up a good company. But I'm concerned about the future of a product in the WebSphere family that is viewed as a departmental solution. I don't think it bodes well.

My team just returned from a week consolidating our contextual research on BPM. The process was very enlightening. Richard Watson will be publishing a series of articles on this research, and we'll present the findings at Catalyst in Prague in April. A few interesting comparisons to our SOA findings:

There's as much confusion about the definition of BPM as there is of SOA

People spoke much more about BPM infrastructure than SOA infrastructure

BPM exhibits almost identical issues related to mindset, adoption, and governance as SOA

The first two points are very interesting and closely related. Some people view BPM entirely through the lens of business process automation, in which case BPM infrastructure is essential to BPM. But I must point out that few of the companies we spoke to placed much value in the BPM execution engine. None of them believed the hype about roundtrip business process models <--> executable code.

Other companies view BPM as a much more strategic discipline that focuses on optimizing business -- not just business processes. In this second scenario, BPM infrastructure is much less important. The modeling, simulation, and monitoring tools are useful, but not essential. These companies place much more value on business improvement and optimization methodologies like Six Sigma and Lean.

We prefer the second definition to the first, and therefore, from our perspective, BPM infrastructure isn't necessary to do BPM.

If IBM wants to become the leader in BPM, they need to get out of the data center and start thinking like business people.

December 14, 2009

I'm getting pretty aggravated by the EU's perpetual blockage of Oracle's acquisition of Sun. All this for MySQL? Don't these guys understand that MySQL is just one product among many in the open source DBMS market? Don't they get that the only folks that might be hurt by this acquisition are Monty Widenius (the founder of the original MySQL company) and his new company, which plans to build a business around MariaDB -- a fork and drop-in replacement for MySQL?

Last Saturday Monty made a plea to "save MySQL". But as it turns out, what he's really asking the EU to do is to force Oracle to revise the license on MySQL from the highly restrictive GPL license to a much more permissive license like Apache or BSD so that he can make money without licensing the code from Oracle. See this great analysis from the folks at Groklaw. I also recommend David Welton's analysis of the deal, and Matt Asay's report.

One of the most ironic things I've seen in this political circus is Richard Stallman asserting that the GPL doesn't actually guarantee software freedom. His logic, though, contradicts all his previous assertions about the freedom supplied by the GPL. The MySQL GPL code is out there and available for anyone to use or fork. The GPL license requires that all such forks must also be licensed under GPL, which ensures that the code will always be free. (Free as in free speech -- not necessarily as in free beer.)

What the GPL really means is that only the copyright owner can make money from the code. (Is that such a bad thing?) Because the original MySQL code is licensed under GPL, and Monty sold his copyright to MySQL, Monty has two options:

License MariaDB only under GPL and make money via subscription and support contracts

Buy a less restrictive license from the copyright owner that enables him to include the code in a commercially licensed package.

Monty claims that the first option is not a particularly good business model (although it has worked very well for RedHat and JBoss), and he has expressed concern that Oracle will not provide a less restrictive license at what he deems a reasonable price.

Okay -- Monty has a personal attachment to the MySQL code base. But he could just as easily build his new business based on one of the many other open source databases out there (e.g., SQLite, Derby, PostgreSQL, and Ingres).

Meanwhile, Sun customers using Sparc, Solaris, Glassfish, JCAPS, Identity Manager, etc. have been left hanging in the wind. Let's just hope that the EU listens to reason.

Over the last few months I have done a lot of talking to clients about their business process management (BPM) efforts. Carrying out Burton Group’s field research study, I have spoken to 35 people representing 23 organizations. I have probably gathered as many definitions of BPM. BPM is the most extreme case of the blind men and the elephant fable I have experienced in my career. How people think about BPM depends entirely on their point of view, their skills, and their experiences.

The situation is not as simple to characterize as "IT people believe BPM is about tools for automating processes and business people believe BPM is a management discipline". The people we spoke to leading BPM initiatives have more complex and subtly differing viewpoints that are shaped by their experiences.

It's partly the rich heritage of BPM that leads to this variety of viewpoints across our enterprises. When we examine the management, scientific and technical trends that have helped shape where we are with BPM today, and the different roles we play, it's not so surprising we all have differing perspectives. I've represented many of those trends in the diagram below, with the influential work[1] for each trend mentioned in the green clouds.

Burton Group's definition of BPM is:

BPM is a discipline for managing business processes explicitly as strategic assets.

The commitment to manage processes explicitly, and treat processes as strategic corporate assets, should be taken independently from any decision to automate part of the workflow. So, BPM infrastructure is not a prerequisite for doing BPM. Process improvement thinking should come before adopting tools (more on this topic soon.)

Burton Group's approach to providing research and advice for our clients is always to focus on practices rather than technology. Analyzing BPM demands this approach, because the tools play very much a supporting role to the organizational change required for optimizing the business through a process lens.

Why haven't the differing viewpoints on BPM converged? Other questions remain: If process improvement has climbed to the top of CIOs agendas, why is business process management (BPM) still executed in enclaves? Even amongst organizations moving forward with BPM, why is there universal difficulty in articulating its business benefit?

Next week the Burton Group BPM team meets face-to-face to harvest the insights that have come from those interviews with BPM leaders. During the consolidation session over several days, we will analyze the 1000s of data points and group them into patterns and relationships. We will find answers to the questions above and more besides. I'm looking forward to publishing the findings early next year, and sharing them at our Catalyst User conferences: Prague in April, and San Diego in July.

December 02, 2009

Soon, we'll be publishing our newest research on presentation
technologies, where we'll be spending a good share of time talking about the fit client. The fit
client offers a blend of benefits from previous and current generation
presentation technologies, including tighter integration with the underlying operating system, ability to execute when not connected, and a very rich user experience (UXP). These capabilities are illustrated in the
diagram below.

Obvious examples of fit client technologies include solutions from entrenched vendors such as Adobe (Air), Microsoft (Silverlight), and Sun (Java FX). But looming on the horizon is a major update to the HTML specification that could pose a serious threat to vendor technologies.

Based on open web technologies, HTML 5 will offer many capabilities that rival those of the commercial fit client. Since the release of the HTML 5 draft specification in 2008, many browser vendors are already supporting some of its capabilities. However, full support won't be complete for years. While this offers proprietary technologies such as Air and Silverlight a short-term advantage in terms of capabilities, they still lack the deep market penetration and ubiquity of the browser.

Without question, the presentation technology space is a volatile hotbed of innovation. As the products and technologies continue to evolve, applications will undergo amazing transformations. Vendors are forging ahead in providing products with unprecedented capabilities, while evolving open web technologies aim to supplant the vendor solutions before they ever gain widespread adoption. The race is on to provide multi-channel, branded, and context aware experiences filled with rich media, and each are on a collision course that is going to define the future of presentation technologies. It's going to be a wild and exciting ride.